KOLKATA: Opposition to the DoT's preferential market access (PMA) regulations, which mandate 100% sourcing of multiple classes of telecom gear from Indian-owned companies on security grounds, seems to be building up. Industry lobbies representing GSM, CDMA and dual-technology companies in India have decried these rules, claiming that the draft PMA notification is ambiguous and leaves considerable scope for abuse since there is no transparent depiction of how a product is deemed 'security sensitive'.

In a joint communique to Telecom Secretary R Chandrasekhar , the Cellular Operators Association of India (COAI), the lobby representing GSM operators, and the Association of Unified Service Providers of India (AUSPI ), the lobby for CDMA and dual-technology operators, have claimed that domestic sourcing and value-addition targets mandated by the draft PMA norms are "unrealistic" since there is no established telecom gear manufacturing ecosystem in India.

The protest note from the telecom industry lobbies came after three leading US trade bodies deplored these draft PMA regulations as contrary to global trade laws that threaten to undermine India's World Trade Organisation (WTO) treaty commitments.

The three US trade bodies — US-India Business Council, Telecommunications Industry Association (TIA) and Information Technology Industry Council — have communicated their misgivings to the DoT, the commerce ministry, the department of electronics and IT and the PMO. The COAI and the AUSPI, in turn, claimed that the draft notification "advocates PMA for equipment having security concerns without depicting how such telecom products are categorised as security sensitive for enabling decision making", and maintained that there is no connection between security and the place of manufacturing.

These industry lobbies have also warned that arbitrary invocation of PMA clauses to private sector procurements "constitutes an unprecedented interference and significant disruption in the global telecommunications market" and would further shackle an already beleaguered Indian telecom industry. "An attempt to link local manufacturing to security considerations is inappropriate since security cannot be guaranteed by merely requiring equipment to be manufactured in India. It is not where but how a product is manufactured that matters," added these lobbies in their letter to Chandrasekhar.

The COAI and AUSPI have also urged the DoT to engage in fresh consultations with all stakeholders before finalising the domestic sourcing and value-addition targets set in the draft PMA notification. They have also urged the government to scrap the 16.38% tax incidence on domestic manufacturing to lend impetus to India's ambitions to become a globally competitive telecom equipment manufacturing hub.